Petroleum Africa
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Wednesday, July 12, 2017
While production boosts in Libya and Nigeria are welcome events for both countries’ economies, it is not so welcome on the global crude markets. The addition of every barrel from the two African countries makes it hard to keep crude prices propped up on the market.
OPEC and non-OPEC producers have been reining in production since January to help boost crude prices, Libya and Nigeria were exempt from the production cuts due to ongoing production issues in both countries. As these issues get sorted out, more production is flowing. In an effort to neutralize this OPEC has invited both producers to a meeting later this month and it is possible the two may have a cap put on how much they can produce.
“The belief is that rising Libyan and Nigerian output are undermining both the efforts at rebalancing the market and the unity of the OPEC/non-OPEC coalition,” Michael Lynch, president of president of Strategic Energy & Economic Research, was quoted by MarketWatch as saying.
“Whether the group can extract more than some promises [from Libya and Nigeria] remains doubtful at this point,” he said. “But it is also doubtful whether Nigeria and Libya can continue growing” their production.
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